How Facebook’s social networking dominance failed to monetize

In May, Mark Zuckerberg was worth US$20 billion. Last month, that figure had fallen to US$9 billion. What went wrong?

By Tim Adams / The Observer, LONDON

This curious list, which sounded like it had been conceived after one too many hackathons, re-emerged a few days later as Facebook’s first-ever piece of brand advertising. A commercial to be released in 13 key territories visualized Zuckerberg’s extended simile: Facebook was like a chair, because people connect with each other when they sit together. That kind of thing.

On message boards and blog posts the advert also appeared to suggest a quality that Facebook had never previously communicated and which is arguably the last thing an advertisement really needs: desperation. The ad was the work of Wieden Kennedy, which is credited with the “Just do it” branding for Nike, but you cannot help feeling its sentiment was Zuckerberg’s own. The CEO likes to talk in mantras and the one he has been repeating for a few years now is the apparently neat idea that “Facebook is a utility.” This then was his somewhat clunky attempt to show that Facebook’s “place on earth” was now a fixture; it is literally part of the furniture.

Is that true? Certainly for millions of its avid and addicted updaters it may sometimes seem that Facebook has become as fundamental to their lives as electricity. Existence without Facebook may be social suicide in those quarters, but could it really be said to have become a necessity? Zuckerberg, seldom shy of ambition, is placing his faith in the idea that it is, or that one day soon it will be. The share price depends on it. He wants us to believe his company will be not one communication platform among many, but will pretty much make up a global network itself. Zuckerberg has, until very recently, an enviable track record of being right in such hunches. Undoubtedly, there is an argument that given both its reach and its financial muscle Facebook is here for good and that things can only get better. It may still be that the YouTube clip will be played to future generations in history lessons as the moment when the means by which they most naturally engaged was first formally valued by the world — and that after a summer of discontent its growth never let up. Or it may just look like the best of times for the social network and that nothing of the future was ever quite so sunny.